(Read more on the industrial market.)
SAN FRANCISCO-Shortly after consummating a new $300-million investment partnership at the end of April, locally based real estate investor D.R. Stephens and Oak Brook, IL-based Inland American Real Estate Trust closed on its first acquisitions. The duo paid $22.9 million for four buildings in Fremont with a combined 212,057 sf.
Officials at D.R. Stephens tell GlobeSt.com that three of the buildings make up Timber Business Park, a 171,360-sf industrial park on 10.25 acres at 44358 Warm Springs Blvd. Two of the buildings (28,800 sf and 56,160 sf) are built out for office/flex use and the other (86,400 sf) is pure industrial.
All three buildings are 100% leased to five different tenants. Tyco International Ltd. Master leases all of one building and half o another, but does not occupy the space. Titan EMS subleases one of the buildings from Tyco. Other tenants include the San Jose Sharks, which has a skating rink in half of one building; and Torrance Van & Storage, which does business as S&M moving.
The fourth building is a 58,748-sf R&D/manufacturing building on 3.47 acres at 4415-4425 Technology Dr. Global Publishing Inc. occupies 40,000 sf. The remaining 18,000 sf is vacant and improved.
As GlobeSt.com reported last week, the partnership, DR Stephens Institutional Fund LLC, is mixing $100-million of equity with $200 million of debt to acquire and reposition value-add industrial and R&D properties throughout the Bay Area over the next several years. D.R. Stephens, the local development partner, is putting up 10% of the equity and Inland American is putting up the remainder in a blind pool format, which is a first for D.R. Stephens.
Don Stephens, who runs D.R. Stephens with his son Lane, has been focusing for the past eight years solely on the type of product the fund plans to acquire. Don Stephens told GlobeSt.com last week that the fund will invest the equity over a two- to three-year period and will hold the assets for between five and seven years. After management fees, he expects the IRR after management fees will range from the mid- to high teens. For the details of the partnership agreement, click on the link above.
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